BayanTel petitions court to shelve Extelcom’s rehab plan

The Manila Standard Today reports that Filipino telco Bayan Telecommunications Inc (BayanTel) has asked the Supreme Court to ditch a court-imposed rehabilitation plan for troubled domestic operator Express Telecommunications Company (Extelcom), saying its own business model for the company would be more economically viable. Extelcom has been at the centre of takeover rumours for at least a year. In July 2009 CommsUpdate reported that another Filipino firm, San Miguel Corp, had hoped to complete its acquisition of Extelcom within months, and had reportedly signed the purchase agreement. It was rumoured that the seller – entrepreneur Roberto Ongpin and UK-based Ashmore Investment Management – had an undertaking to ‘clean up the company’ before San Miguel assumed management control said. The Ongpin-Ashmore group were to purchase shares in Extelcom from the telco’s creditors Trans Digital Excel, as Extelcom was currently under corporate rehabilitation with a total outstanding debt of PHP9.017 billion (USD186.9 million). Trans Digital, a major creditor of Extelcom, still owns 60% of the company.

BayanTel and its partner Marifil Holdings Corp have now submitted a 106-page petition in which they argued their proposed rehabilitation plan would enable Extelcom to generate cumulative revenue of PHP1.8 billion over ten years. Its filing said: ‘Unless the approved rehabilitation plan is altered or modified… there will be no improvement in the trend of Extelcom’s financial performance … no telecommunications carrier will partner with Extelcom because of its unattractive business plan and insufficient cash generation.’ BayanTel, the telecom unit of Lopez-owned Benpres Holdings Corp, claims that it is a perfect commercial partner for Extelcom because of its sufficient capital and technical expertise in wireless communications service. BayanTel has offered to share its provincial wireless local loop revenues and its EBITDA from roaming service for foreign visitors with Extelcom in exchange for the use of the latter’s frequencies in the 800MHz band.